Isracard’s revenues have grown by 8% since the beginning of the year, net profit has doubled

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Group Isracard This morning (Tuesday) published its financial results for the third quarter and the first nine months of 2021, and showed revenue growth both relative to the corresponding quarter last year and relative to the previous quarter. At the same time, the company also recorded a sharp increase in net profit, mainly as a result of the decrease in expenses due to credit losses.

Revenues in the third quarter grew by 9% to NIS 585 million, and increased by 4% compared to the previous quarter of the year. The improvement is mainly attributed to high double-digit growth in revenues from credit card operations and an increase in the volume of outbound tourism turnover, although still at a significantly lower level than outbound Corona outbound tourism turnover.

Revenues from credit card operations increased by 16% in the quarter and amounted to NIS 485 million, in light of a 14.7% increase in the turnover of credit card transactions and an increase in revenues attributed to outbound and outbound tourism (which led to an increase in foreign exchange transaction fees).

(Net) interest income in the quarter amounted to NIS 109 million, a very slight increase compared to NIS 110 million in the corresponding quarter. At the same time, there was an increase of about 2% in these revenues compared to the previous quarter.

Expenses for credit losses fell

What contributed greatly to the results of this company was a drop in expenses due to credit losses, which decreased by 79% and amounted to NIS 12 million, compared with NIS 57 million in the corresponding quarter. The sharp decline was mainly due to a reduction in the group provision rate in light of the improvement in macroeconomic estimates and the return of the economy to pre-Corona activity, a decrease in the credit to individuals and a sharp 51% decrease in write-offs (net).

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Bottom line, Isracard ended the quarter with a 62% increase in net profit to NIS 99 million. The quarterly profit reflects a return on average capital (annual calculation) of 15.6%, compared to 10.3% in the corresponding quarter last year and 7.4% (excluding one-time events) at the end of 2020.

Net profit doubled in the first 9 months of the year

A look at the results for the first nine months of the year shows that revenues grew by 8% to NIS 1.66 billion, while net profit more than doubled (112%) and amounted to NIS 286 million. Here, too, the sharp increase is attributed, among other things, to a decrease in expenses for credit losses that amounted to NIS 17 million in the period, compared with NIS 225 million in the corresponding period.

Since the beginning of the year, the turnover of credit card transactions has increased by 15.7% and amounted to NIS 135.9 billion. Isracard’s ticket sales stood at 5.63 million at the end of the quarter, an increase of 4% compared to the third quarter of 2020, of which 4.22 million are active tickets (compared to 4.1 million last year). The number of active non-bank credit cards increased by 7% to 1.2 million, with the volume of use of non-bank cards increasing by 22.9% since the beginning of the year.

The balance of credit to private individuals amounted to NIS 3.99 billion at the end of the third quarter, compared with NIS 4.07 billion at the end of 2020, along with a slight increase in the average annual interest rate per day to 9.2% compared to 9% at the end of the year.

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Dr. Ron Wexler, CEO of Isracard, who will retire soon after 6 years, said that the improvement in all parameters is a result of a series of actions taken by the company, “including reducing costs, improving the credit portfolio and improving the mix of activities in all sectors.” “For continuous improvement in the economy and business environment characterized by growth and an increase in consumption and demand. I am sure that through the management headed by the incoming CEO, Ran Oz, and with the support of the board, headed by Tamar Yasur, along with the most committed and professional employees and managers, Isracard will continue to new heights.”

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